Riddle Me this Batman: Over the past 2 months, we have seen at least 3 rallies predicated on the rumor of an Ambac (ABK) rescue -- either through a capital infusion, or a direct purchase of the company.
Let me remind you that just a week ago their triple-A rating was confirmed by the (choose one a. criminally negligent; b. technically incompetent) organizations known as Moody's and S&P.
You can imagine my surprise when the stock was halted Tuesday. WSJ Marketbeat announced "Ambac Bailout Imminent! Maybe! Possibly!"
Then we learn that the deal was dead, and that Ambac needs to raise $1.5 billion dollars. Thus, all of those rumors and CNBC appear to have been patently false.
But here's the question that keeps coming up: Who are the people leaking this information? And, is this legal? Now, we have learned that all of these attempts at manipulating the market were based on rumors that proved to be false.
Question: If material, non-public, inside information turns out to be none of the above (i.e., just rumors), has a crime been committed?
Ambac Bailout Imminent! Maybe! Possibly!
Marketbeat, March 5, 2008, 12:47 pm